Racial divide in savings

Rogers said one reason black investors may have felt stung so badly by the 2002 market crash was their choice of mutual funds. He said research shows that black investors often do not hold multiple types of funds to diversify and decrease risk in downturns. On average, blacks choose 1.7 funds in their 401(k), compared with 3.7 among whites.

Ariel and Schwab are calling on businesses to do more to educate employees about 401(k)'s or other retirement savings plans in the workplace. And they are encouraging businesses to support financial education in schools.

Ariel supports the Ariel Community Academy, a school on Chicago's South Side. The school teaches saving and investing to children from pre-kindergarten through 8th grade. As they progress, they are actively involved in investing money.

Both Rogers and Toppin lauded McDonald's Corp. as an example of a company that has undertaken efforts to increase 401(k) participation among black employees.

McDonald's noted four years ago that participation in the company 401(k) plan was lower among minority restaurant managers than white managers. To build up participation among both groups, the company increased pay levels by 1 percent and had managers invest the raise in a 401(k).

They were allowed to opt out if they wished, but every $1 the managers put in the plan was matched by $3, said Rich Floersch, executive vice president of human resources.

Larger savings are rewarded with even higher percentages of matching money.

In addition, McDonald's has provided advisers to help employees select mutual funds, and minority employees meet with peers to discuss saving and investing.

Floersch said participation in the 401(k) plan by African-Americans has climbed to 95 percent from about 50 percent.